Sparking a Small-Town Business Ecosystem

The national-level response to the coronavirus pandemic descends from tragedy into catastrophe. The black granite slabs of the Vietnam Veterans Memorial in Washington display the names of more than 58,000 Americans who died in that war. Those deaths occurred over more than 15 years of conflict. At current rates, a larger number of Americans will have died from this pandemic within less than two months. Unemployment rates are already reaching levels that no American born after the Great Depression of the 1930s had witnessed or experienced.

So the rest of the American system is left to pick up the slack. Mayors and governors, health workers and grocery employees, business people and religious leaders, teachers and parents. In recent installments Deb Fallows and I have described some of these responses: innovations from libraries; plans to protect the small businesses that have been crucial to local economic revival; changes in a statewide program in California; responses from a nationwide nonprofit network; and how recent military veterans are converting a service ethic to civilian pursuits.

Today’s report is the first of two on relatively new tech companies, each based in a non-coastal, “left behind” part of the country, that have been bringing economic, educational, and life-prospect opportunities to their regions, and how they are now trying to cope with the current disaster. Today’s concerns the Innovation Collective, based in Coeur d’Alene, Idaho. Later we’ll revisit Bitwise Industries, based in Fresno, California, which we have followed over the years.

Innovation Collective: Nick Smoot, who is now in his late 30s, grew up in Coeur d’Alene. He moved away after high school and spent the next dozen years as a tech entrepreneur. He founded, built, and sold three internet-based companies (mainly involving test-prep and marketing—details here), and he became a speaker and commentator in the tech world.

Then at around age 30 he returned to Idaho. He told me that he came back to his home town for a reason that is related to fundamental debates about the American economy in recent years. Namely: how to share the opportunities and benefits of a tech-based economy more broadly—across regions, among races, for people of different backgrounds and economic groups—so that they create a broader-based, inclusive, fairer economy. In the immediate aftermath of the 2016 election, and as an uneven recovery spread across the country in the next few years, the challenge of “inclusive growth” was discussed in countless reports and conferences, in political speeches and in newspaper articles. Like most of the other people we have been chronicling, Smoot believed that he could help these ideals and action plans into effect, back in his smallish (population 50,000) home town.

“I think capitalism is great,” he told me, when we spoke on the phone last month. “But my goal is to reframe the word ‘capitalism,’ because a system that drives the production of too much, for the consumption of too few, has reached its limits.” He said that his goal was to use market incentives to create a tech-based business system “that is more stable and equitable—and to repair gashes in communities, rather than deepen them. We want to unlock potential in all people and especially those who feel they have been left behind.”

The taming and repair of capitalism is, to put it mildly, a long-standing and complex issue. (Here are two big Atlantic stories I have done on just this topic, from 2015, based on a new project by Al Gore, and from 1993, about an obscure German economist named Friedrich List.)

In practice, what this has meant in Smoot’s case is trying to foster, assemble, and connect the ingredients of a business-startup ecosystem in parts of the country that have felt cut off from the Bay Area-Seattle-New York technology boom. A few years ago he made a Vimeo statement summing up the ambitions, which you can see here. His “Innovation Collective” offers training sessions, mentor relationships, public and private events, supply-chain relationships, studies of regional economic possibilities, training in work-preparedness and other “life skills,” and other forms of “soft” infrastructure. Measures like these could seem airy or trivial—until you remember how central a role such informal ties have played in the rise of tech-economic centers in San Francisco, Boston, or Seattle, and how the absence of this soft infrastructure has hindered much of smaller-town, inland America.

“I look on every citizen in town as a frustrated creator,” Smoot told me last month. “Because they are not creating, they are not happy—and the ones who are happiest are the ones who are able to create. We build communities around this idea of human potential.” Talent, ambition, and creative potential are very widely dispersed, he said. Opportunity has not been. That is the gap he has hoped his Innovation Collective could help close.

In Coeur d’Alene, his organization developed a partnership that restored a long-vacant Elks building in the center of downtown. It became the “Innovation Den”—and now the site of over 60 offices, a barber shop, a coffee shop, a robotics and computer-science program, and a civic site, for events like the one you see in the photo above. The Innovation Collective has launched a low-cost tech-training program called Inspire. The IC offers different tiers of membership, from free to about $800 per year. It has started a venture fund, directed at new businesses in Coeur d’Alene and similar communities across the country.

Smoot described to me some of its operations in Utica, New York; Brooksville, Florida; and Spokane, Washington. In each of the cities, the emphasis has been on economic niches that match the geographical, cultural, and business-history particularities of that town. Coeur d’Alene, for instance, has a strong robotics sector. Utica, like many other cities in the Northeast (for instance, Erie), has a long manufacturing heritage, in recent decline, and a diverse population including many immigrants and refugees. You can read about those and other projects here.

All that was in the seven years before the crisis. And now? Last month, as the lockdowns were beginning, Smoot produced a six-minute LinkedIn video addressed to small companies like those he had been working with, in small communities across the country. “You need this, we need this, I need this,” he said, about trying to connect small firms with others facing similar problems. (You will see this about three and a half minutes into the LinkedIn clip.)

We all have more to give …. When a good chunk of our country is isolated in their homes, more isolated than they were before, we have a choice. We can become worse, or we can become better. We can become less, or we can become greater.

Choose to become greater. Choose to become more.

Again, in isolation it could sound just like a motivational speech, but it’s connected to the “left behind America” work that Smoot and his organization have been doing for years.

When I asked Smoot how his emphasis had shifted, he said it was primarily on the physical, mental, and emotional health of people in his extended community, and the creation of locally based, self-sustaining networks, rather than sending online “content” from headquarters. As he put it in an email:

It’s very important to note, we are creating “Local Digital Interactive Communities,” not streaming pre recorded content or creating communities of non local people. VERY important.

These types of communities are made up of 100’s of local experiences per month that feature local faces facilitating experiences that add value to three crucial areas for stability and recovery; economic, mental, and physical health. Through community, these focuses help you become the kind of person who can go get the future you want.

He went on to explain how this approach differed from simple Zoom-meeting connectedness, including “large and small group experiences to avoid hiding online” and a series of regular accountability and goal-setting stages.

“Stand tall today,” Smoot says in the introduction to his LinkedIn video. “Shoulders back, chin up … Together, as a big community, we choose to build a tomorrow we want, through community today.”

As I ask at the end of each of these updates: Is an approach like this “the” answer to the current public health and economic crisis? Of course not. And I am sure that the IC model has limitations and weak points as well as strengths.

But is it part of “an” answer? Yes, I believe it can be, as well as an example of the creativity with which Americans across the country are responding to our emergency. The history of these times should include the people and organizations that are trying to solve the moment’s problems, as well as the institutions that have failed.

Next up: the latest news from Bitwise.

More from this series